Beat back inflation, Chidambaram says

New Delhi, April 16 (IANS) Asking people not to panic and “beat back inflation”, Finance Minister P. Chidambaram Wednesday assured parliament that the government will take more steps to rein in prices, which is rising at the fastest rate in 41 months. “This inflation is largely triggered by international prices… We cannot panic at this time. This inflation is reflected in all the international markets from China to Venezuela,” the finance minister told the Lok Sabha Wednesday.

“We must beat back inflationary pressures,” the minister told the Lok Sabha and added that the “government would not hesitate to take tough administrative measures” to keep prices under control.

The finance minister also came down heavily on state governments and said they must ensure a greater thrust on controlling spiralling prices that has pushed India’s annual rate of inflation to 7.41 percent in recent weeks - the highest in 41 months.

“States need to ensure stock limits and prosecute hoarders,” he said, adding an “inadequate action” has been seen on the part of some state governments who need to enforce more stringent steps to keep the prices of food items under control.

Apart from supply-side measures, he also hinted at “several monetary steps” to address the issue that has invited flak not just from opposition parties, but also from the Left which gives outside support to the ruling coalition.

“The Reserve Bank of India will take monetary measures shortly,” he said, in an obvious reference to the annual monetary and credit policy that is due to be presented by the central bank April 29.

The central bank has been targeting to keep inflation under five percent.

“Global financial turbulence has cast its spell on most markets and we cannot be insulated from that,” Chidambaram said, as opposition voiced its concern and charged the United Progressive Alliance (UPA) government with inaction.

In recent weeks, the government has announced several steps to rein in prices - like banning export of non-basmati rice, pulses and cement.

While Chidambaram explained the government’s viewpoint, Communist Party of India (CPI) MP Gurudas Das Gupta launched a blistering attack on the United Progressive Alliance (UPA) government for its failure to rein in inflation. The CPI, like the CPI-M, supports the government from outside.

“Manmohan Singh government must justify its existence. It seems there is no government in place. Things have been left to market forces,” said Das Gupta, initiating a discussion in the Lok Sabha on rising prices.

“The government is out of place,” he said.

“The government should have acted on the suggestions offered by Left parties to control inflation. Prices of petroleum products should have been reduced,” said Das Gupta.